This information is from the Intenat Revenue Service (word for word)
The IRS reminds homeowners that they still have time this year to make energy-saving and green-energy home improvements and qualify for either of two home energy credits.
The Nonbusiness Energy Property Credit is aimed at homeowners installing energy efficient improvements such as insulation, new windows and furnaces. The credit is more limited than in the past years, but can still provide substantial tax savings.
• The 2011 credit rate is 10 percent of the cost of qualified energy efficiency improvements. Energy efficiency improvements include adding insulation, energy-efficient exterior windows and doors and certain roofs. The cost of installing these items does not count.
• The credit can also be claimed for the cost of residential energy property, including labor costs for installation. Residential energy property includes certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass fuel.
• The credit has a lifetime limit of $500, of which only $200 may be used for windows. If the total of nonbusiness energy property credits taken in prior years since 2005 is more than $500, the credit may not be claimed in 2011.
• Qualifying improvements must be placed into service to the taxpayer’s principal residence located in the United States before January 1, 2012.
Homeowners going green should also check out the Residential Energy Efficient Property Credit, designed to spur investment in alternative energy equipment.
• The credit equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property.
• No cap exists on the amount of credit available except for fuel cell property.
• Generally, labor costs are included when figuring this credit.
Not all energy-efficient improvements qualify for these tax credits, so homeowners should check the manufacturer’s tax credit certification statement before they purchase. Taxpayers can normally rely on this certification statement which can usually be found on the manufacturer’s website or with the product packaging.
Eligible homeowners can claim both of these credits on Form 5695, Residential Energy Credits when they file their 2011 federal income tax return. Because these are credits and not deductions, they reduce the amount of tax owed dollar for dollar. An eligible taxpayer can claim these credits regardless of whether he or she itemizes deductions on Schedule A.
Monday, November 21, 2011
Thursday, November 3, 2011
2012 Tax Codes for Standard Deductions, EIC, Foreign Earned Income Deduction
As with each tax year, personal excemptions and standard deductions will go up and tax brackets will widen due to inflaztion
By law the dollar amount in certain tax formulas increase each year, and affect each tax payer.
The value of each personal and dependent exemption, for 2012 will be, for most taxpayers, $3,800, up $100 from 2011.
The new standard deduction is $11,900 for married couples filing a joint return, up $300, $5,950 for singles and married individuals filing separately, up $150, and $8,700 for heads of household, up $200.
The IRS reports that nearly two out of three taxpayers take the standard deduction
Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $70,700, up from $69,000 in 2011.
Credits, deductions, and related phase outs.
For tax year 2012, the maximum earned income tax credit (EITC) for low- and moderate- income workers and working families rises to $5,891, up from $5,751 in 2011. The maximum income limit for the EITC rises to $50,270, up from $49,078 in 2011.The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children.
The foreign earned income deduction rises to $95,100, an increase of $2,200 from the maximum deduction for tax year 2011.
The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $104,000 for joint filers, up from $102,000, and $52,000 for singles and heads of household, up from $51,000.
For 2012, annual deductible amounts for Medical Savings Accounts (MSAs) increased from the tax year 2011 amounts; please see the table below.
Medical Savings Accounts (MSAs)
Self-only coverage
Family coverage
Minimum annual deductible
$2,100
$4,200
Maximum annual deductible
$3,150
$6,300
Maximum annual out-of-pocket expenses
$4,200
$7,650
The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from the phase out limits for tax year 2011. For single taxpayers, the phase out ranges remain at the 2011 levels.
Estate and Gift
For an estate of any decedent dying during calendar year 2012, the basic exclusion from estate tax amount is $5,120,000, up from $5,000,000 for calendar year 2011. Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,040,000, up from $1,020,000 for 2011.
The annual exclusion for gifts remains at $13,000.
Other Items
The monthly limit on the value of qualified transportation benefits exclusion for qualified parking provided by an employer to its employees for 2012 rises to $240, up $10 from the limit in 2011. However, the temporary increase in the monthly limit on the value of the qualified transportation benefits exclusion for transportation in a commuter highway vehicle and transit pass provided by an employer to its employees expires and reverts to $125 for 2012.
Several tax benefits are unchanged in 2012. For example, the additional standard deduction for blind people and senior citizens remains $1,150 for married individuals and $1,450 for singles and heads of household.
By law the dollar amount in certain tax formulas increase each year, and affect each tax payer.
The value of each personal and dependent exemption, for 2012 will be, for most taxpayers, $3,800, up $100 from 2011.
The new standard deduction is $11,900 for married couples filing a joint return, up $300, $5,950 for singles and married individuals filing separately, up $150, and $8,700 for heads of household, up $200.
The IRS reports that nearly two out of three taxpayers take the standard deduction
Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $70,700, up from $69,000 in 2011.
Credits, deductions, and related phase outs.
For tax year 2012, the maximum earned income tax credit (EITC) for low- and moderate- income workers and working families rises to $5,891, up from $5,751 in 2011. The maximum income limit for the EITC rises to $50,270, up from $49,078 in 2011.The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children.
The foreign earned income deduction rises to $95,100, an increase of $2,200 from the maximum deduction for tax year 2011.
The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $104,000 for joint filers, up from $102,000, and $52,000 for singles and heads of household, up from $51,000.
For 2012, annual deductible amounts for Medical Savings Accounts (MSAs) increased from the tax year 2011 amounts; please see the table below.
Medical Savings Accounts (MSAs)
Self-only coverage
Family coverage
Minimum annual deductible
$2,100
$4,200
Maximum annual deductible
$3,150
$6,300
Maximum annual out-of-pocket expenses
$4,200
$7,650
The $2,500 maximum deduction for interest paid on student loans begins to phase out for a married taxpayers filing a joint returns at $125,000 and phases out completely at $155,000, an increase of $5,000 from the phase out limits for tax year 2011. For single taxpayers, the phase out ranges remain at the 2011 levels.
Estate and Gift
For an estate of any decedent dying during calendar year 2012, the basic exclusion from estate tax amount is $5,120,000, up from $5,000,000 for calendar year 2011. Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,040,000, up from $1,020,000 for 2011.
The annual exclusion for gifts remains at $13,000.
Other Items
The monthly limit on the value of qualified transportation benefits exclusion for qualified parking provided by an employer to its employees for 2012 rises to $240, up $10 from the limit in 2011. However, the temporary increase in the monthly limit on the value of the qualified transportation benefits exclusion for transportation in a commuter highway vehicle and transit pass provided by an employer to its employees expires and reverts to $125 for 2012.
Several tax benefits are unchanged in 2012. For example, the additional standard deduction for blind people and senior citizens remains $1,150 for married individuals and $1,450 for singles and heads of household.
Monday, October 17, 2011
$195 a Month Penalty for Filing Late Partnership and S Corporation Returns
Beginning in 2009, the late filing penalty for a partnership return is $89 for each MONTH, or part of a month (up to 12 months) the return is late. No penalty is imposed if the partnership can show that they reason for filing late was due to reasonable cause.
For tax years beginning AFTER 2009, the late filing penalty for a partnership return is $195 for each month, or any part of a month, up to 12 months. Once again, if you can show just reason, why the return is late, the penalty won't be imposed.
The penalty for filing an S corporation Return late after, 2009 is also $195 for each month or any part of a month, up to 12 months.
Reasonable cause will release you from having to pay the penalty.
However, if tax is owed with the return, the penalty is INCREASED.
Let's discuss Reasonable Cause:
1. The dog ate the documentation? No.
2. Natural Disaster? Yes.
3. Theft of documents? Maybe (Make sure there is a police report)
4. Forest Fire? Yes
5. Death or Serious illness in the immediate family? Yes
6. Serious illness of one of the partners of the corporation? Probably
7. Accountant left town with all the Corporations money? Probably
You get the idea of what the IRS deems as reasonable cause? Each case is decided separately, I am sure. So you never know. However, chances are they have the acceptable reasons, written within the Tax Codes!
For tax years beginning AFTER 2009, the late filing penalty for a partnership return is $195 for each month, or any part of a month, up to 12 months. Once again, if you can show just reason, why the return is late, the penalty won't be imposed.
The penalty for filing an S corporation Return late after, 2009 is also $195 for each month or any part of a month, up to 12 months.
Reasonable cause will release you from having to pay the penalty.
However, if tax is owed with the return, the penalty is INCREASED.
Let's discuss Reasonable Cause:
1. The dog ate the documentation? No.
2. Natural Disaster? Yes.
3. Theft of documents? Maybe (Make sure there is a police report)
4. Forest Fire? Yes
5. Death or Serious illness in the immediate family? Yes
6. Serious illness of one of the partners of the corporation? Probably
7. Accountant left town with all the Corporations money? Probably
You get the idea of what the IRS deems as reasonable cause? Each case is decided separately, I am sure. So you never know. However, chances are they have the acceptable reasons, written within the Tax Codes!
Friday, October 14, 2011
Tax Breaks 2010, Extension Deadline October 17, 2011, Off Shore Account Info from the IRS
There are as many as 10.1 million taxpayers who requested an automatic extension in filing their tax return. October 17th is the deadline for the extension, because the 15th of October of this year is on a Saturday.
The IRS also wanted taxpayers to know that they can e-File their 2010 tax retuur, even if they ae on extension.
If you live in a natural disaster area, then your deadline to file is October 31 of 2011.
Members of the military and those serving in Iraq, Afganistand and other combat zones don't have to file until at least 180 days after they leave the combat zone. (See ITS Publication 3)
In this same press release, the IRS remind small businesses to check for overlooked tax benefits, such as the new small business health care tax credit. The new health care tax credit is designed to encourage small business owners who meet certain requirements to offer health insurance to their employees. You can learn more about this by reading the instructions
You use Form 8941 to figure the credit Follow the instructions, or remind your tax person, to see if your small business qualifies.
TAX BREAKS FOR 2010
Taxpayers should also check various tax breaks extended or expanded by the recovery law and other recent tax legislation.
1. These include the Making Work Pay Credit
2. American opportunity credit and other higher education tax benefits for parents and students,
3. Rresidential energy credits for various energy-saving home improvements
4. Earned Income Tax Credit for low- and moderate-income workers and working families
5. Child tax credit and additional child tax credit for low- and middle-income families
The other BIG reminder from the IRS was to remind U.S. citizens and resident aliens that by federal law, they are required to report income from ALL sources, both foreign and domestic, INCLUDING income from foreign trusts and foreign bank and securities accounts. This information is to be provided to the IRS an Schedule B and could require additional reporting.
Note: People, the IRS is serious about this. If you have a foreign trust or foreign account, which may or may not have your name on it, however, you still receive income from the account, check with a Tax Attorney. You don't want the IRS to somehow find out that you are benefiting directly or indirectly from a foreign trust account. The new agreements which the IRS has initiated with foreign banking centers is not understood by many. An experienced Tax Attorney will be able to help you.
.
The IRS also wanted taxpayers to know that they can e-File their 2010 tax retuur, even if they ae on extension.
If you live in a natural disaster area, then your deadline to file is October 31 of 2011.
Members of the military and those serving in Iraq, Afganistand and other combat zones don't have to file until at least 180 days after they leave the combat zone. (See ITS Publication 3)
In this same press release, the IRS remind small businesses to check for overlooked tax benefits, such as the new small business health care tax credit. The new health care tax credit is designed to encourage small business owners who meet certain requirements to offer health insurance to their employees. You can learn more about this by reading the instructions
You use Form 8941 to figure the credit Follow the instructions, or remind your tax person, to see if your small business qualifies.
TAX BREAKS FOR 2010
Taxpayers should also check various tax breaks extended or expanded by the recovery law and other recent tax legislation.
1. These include the Making Work Pay Credit
2. American opportunity credit and other higher education tax benefits for parents and students,
3. Rresidential energy credits for various energy-saving home improvements
4. Earned Income Tax Credit for low- and moderate-income workers and working families
5. Child tax credit and additional child tax credit for low- and middle-income families
The other BIG reminder from the IRS was to remind U.S. citizens and resident aliens that by federal law, they are required to report income from ALL sources, both foreign and domestic, INCLUDING income from foreign trusts and foreign bank and securities accounts. This information is to be provided to the IRS an Schedule B and could require additional reporting.
Note: People, the IRS is serious about this. If you have a foreign trust or foreign account, which may or may not have your name on it, however, you still receive income from the account, check with a Tax Attorney. You don't want the IRS to somehow find out that you are benefiting directly or indirectly from a foreign trust account. The new agreements which the IRS has initiated with foreign banking centers is not understood by many. An experienced Tax Attorney will be able to help you.
.
Thursday, October 13, 2011
Investing and Building Wealth for Beginners, A Special Series of Collected Articles and Videos
Believe it or not, a group of millionaires were asked what were the basic steps to creating wealth. Kiplinger's Magazine published the results, which you can find by clicking on the above link.
The list of 12 steps to become a millionaire are down to earth, doable and interesting. Regardless if you work a job, or, are self-employed, there are tips for everyone.
To find the entire series of Investing and Building Wealth for Beginners, you can review index of articles and videos at http://www.taxeswilltravel.com/article_index1A.htm
You can find topics on the key to wealth, how one man became wealthy on a $2$20,000 a year job, and a few subjects such as How to Build Real Estate Wealth & Prepare for Your Child's Education.
These articles were assimilated by Taxes Will Travel.com for clients and visitors to learn more about creating wealth.
The list of 12 steps to become a millionaire are down to earth, doable and interesting. Regardless if you work a job, or, are self-employed, there are tips for everyone.
To find the entire series of Investing and Building Wealth for Beginners, you can review index of articles and videos at http://www.taxeswilltravel.com/article_index1A.htm
You can find topics on the key to wealth, how one man became wealthy on a $2$20,000 a year job, and a few subjects such as How to Build Real Estate Wealth & Prepare for Your Child's Education.
These articles were assimilated by Taxes Will Travel.com for clients and visitors to learn more about creating wealth.
Monday, October 10, 2011
Five Major Tax Loopholes, Because Tax Evasion is Illegal, But Tax Avoidance Is Not
1. I will provide you with the keywords, then you do the research. Before using these types of loopholes, consult with your Attorney. Very few taxpayers take advantage of these methods, without consulting with an Attorney or an Experienced CPA.
Keywords: assets, donate to 'your charitable trust', sell the assets, invest the proceeds, (all in the name of the trust)
2. You can always place a portion of your lifestyle cost into your corporation/business. Example: The summer home on the beach, is purchased by the corporation, to be used by corporate clients! (You will need an experienced tax professional to report this correctly on your corporate tax return)
3. ALWAYS know what your corporate/business profit will be. Spend (on legal tax deductions) until the corporate taxes are reduced.
4. Tip: Never spend in one year, more then you have reported to the IRS, unless you are willing to explain where the cash came from? (Every time there is a transaction over $5K, the financial institution, by law, has to report it)
5. Defer your income. If your corporation owes you $2 million, invest the money (safe money account) and take procession of the income during a year when your income is much lower, or when your business expenses are much higher.
Note: You will notice that the most effective tax loopholes can only occur when a tax payer has his/her own business/corporation - I will post loopholes for individuals in another couple weeks
Tips:
a. The wealthy own as little as possible. Very few of their assets are in their name!
b. It is NOT illegal to have offshore accounts, it's just illegal NOT to tell the IRS!
c) Those who are striving to accumulate wealth, have a habit of spending around 80 percent of their disposable income on investments which will generate a return! (This means, when starting out, they drive older cars, live in questionable neighborhoods, and take their lunch to work)
Keywords: assets, donate to 'your charitable trust', sell the assets, invest the proceeds, (all in the name of the trust)
2. You can always place a portion of your lifestyle cost into your corporation/business. Example: The summer home on the beach, is purchased by the corporation, to be used by corporate clients! (You will need an experienced tax professional to report this correctly on your corporate tax return)
3. ALWAYS know what your corporate/business profit will be. Spend (on legal tax deductions) until the corporate taxes are reduced.
4. Tip: Never spend in one year, more then you have reported to the IRS, unless you are willing to explain where the cash came from? (Every time there is a transaction over $5K, the financial institution, by law, has to report it)
5. Defer your income. If your corporation owes you $2 million, invest the money (safe money account) and take procession of the income during a year when your income is much lower, or when your business expenses are much higher.
Note: You will notice that the most effective tax loopholes can only occur when a tax payer has his/her own business/corporation - I will post loopholes for individuals in another couple weeks
Tips:
a. The wealthy own as little as possible. Very few of their assets are in their name!
b. It is NOT illegal to have offshore accounts, it's just illegal NOT to tell the IRS!
c) Those who are striving to accumulate wealth, have a habit of spending around 80 percent of their disposable income on investments which will generate a return! (This means, when starting out, they drive older cars, live in questionable neighborhoods, and take their lunch to work)
Thursday, October 6, 2011
Another tax loophole has been published: Business Rental Expenses, and a Touch of Entertainment http://ping.fm/Rddkl
Tax Loophole: Line 20b of Schedule C and a Touch of Business Entertainment
One of many tax loopholes to come
Rental of "Other Business Property" - as long as it has to do with business, the monthly cost for rental is tax deductible. Rather then to show a large profit at the end of the year, after you have taken the deductions for retirement exclusion from income, credits, you may want to look at some additional 'business property' rental cost.
No, I'm not sure if you can lease a learjet, (a couple times a year) unless you can prove that your business can benefit from such a transaction!
What was that? Yes, renting a villa in Hawaii and taking several clients (in the learjet) can be considered a necessary tax write off for a business conference.
Definitely, season tickets to an NFL game can be a tax write off, as long as you take a business client with you to the game.
***** Documentation is key. Write down who you took where, why and what was the business connection. Keep a log of ALL expenses. (Schedule C - Meals and Entertainment)
Just a Note: Tax clients who spend lots and lots of money on meals for their potential clients, almost always, earn substantially more then those who don't.
Rental of "Other Business Property" - as long as it has to do with business, the monthly cost for rental is tax deductible. Rather then to show a large profit at the end of the year, after you have taken the deductions for retirement exclusion from income, credits, you may want to look at some additional 'business property' rental cost.
No, I'm not sure if you can lease a learjet, (a couple times a year) unless you can prove that your business can benefit from such a transaction!
What was that? Yes, renting a villa in Hawaii and taking several clients (in the learjet) can be considered a necessary tax write off for a business conference.
Definitely, season tickets to an NFL game can be a tax write off, as long as you take a business client with you to the game.
***** Documentation is key. Write down who you took where, why and what was the business connection. Keep a log of ALL expenses. (Schedule C - Meals and Entertainment)
Just a Note: Tax clients who spend lots and lots of money on meals for their potential clients, almost always, earn substantially more then those who don't.
Wednesday, October 5, 2011
Information on Construction, Invoice Lines of Credit for Commercial Contracts - No financials, no credit scores http://ping.fm/HqxDS
Tuesday, October 4, 2011
What Do You Do When Your Pension Won't Pay For Your Retirement? check out: http://ping.fm/Oa7WP and look on the left side of the page.
Companies with major contracts and limited cash flow can face the same financial troubles as companies with no contracts. Because the banks are saying "No" to more small companies, business owners are seeking working capital options. Invoice Lines of Credit, is one such option, which many companies are turning to. Invoice Lines of Credit or Accounts Receivable Financing, is the selling of a companies Invoices, to a Lender for a fee, for immediate cash.
The important part of this solutiion is that, all fees are tax deductible.
We provide placement for such funding, and have been doing so, successfully for the past six years. If you need a solution to cash flow issues, go to: http://ping.fm/DsKXU
The important part of this solutiion is that, all fees are tax deductible.
We provide placement for such funding, and have been doing so, successfully for the past six years. If you need a solution to cash flow issues, go to: http://ping.fm/DsKXU
Tax Loopholes, Neutralizing the IRS
Tax loopholes. This appears to be the most popular keyword associated with the IRS, online. Many companies offer many different tax services, but at the end of the day, the keyword with the most searches has been, "tax loopholes"
Since I am a tax professional who happens to be an SEO / Internet Marketing Specialist, it would be hypocritical for me to ignore the signs. The people have spoken, they want to learn more about how to neutralize the IRS.
After 13 years of extensive tax experience, I have truly ran across some interesting and successful tax loopholes, and for the next several months, I will place this information on my blog, for the sole purpose of creating an e-book from my blog at a later date.
Today is the first day of this uncomfortable revolution. I love doing taxes, however, the search engines and you the people have spoken. I reserve the right to be incorrect, however, it's not part of my nature.
You can suscribe to the blog or the RSS Feed.
Since I am a tax professional who happens to be an SEO / Internet Marketing Specialist, it would be hypocritical for me to ignore the signs. The people have spoken, they want to learn more about how to neutralize the IRS.
After 13 years of extensive tax experience, I have truly ran across some interesting and successful tax loopholes, and for the next several months, I will place this information on my blog, for the sole purpose of creating an e-book from my blog at a later date.
Today is the first day of this uncomfortable revolution. I love doing taxes, however, the search engines and you the people have spoken. I reserve the right to be incorrect, however, it's not part of my nature.
You can suscribe to the blog or the RSS Feed.
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